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Crackdown on use of city property befuddles some

By Steve Ramirez / sramirez@lcsun-news.com

Posted:
03/18/2013 06:50:45 PM MDT

LAS CRUCES — City government hasn't made too many friends lately, City Manager Robert Garza admits.

Nonprofit organizations particularly are frustrated about what appears to be an abrupt change in the way the city allows them to use city-owned buildings for activities that purportedly provide some kind of public benefit or service to city residents.

"Can the city of Las Cruces use tax dollars or public property and facilities to allow others to run private enterprises and businesses," Garza said. "The simple answer is no."

Garza explained it all began harmlessly enough.

A nonprofit organization operating in a city-owned building received funding from the New Mexico Legislature to repair its roof. But when the money to make the repairs was requested, the New Mexico Department of Finance and Administration asked the city and the nonprofit to provide a copy of its lease agreement for the building. The contract was scrutinized because it was deemed by DFA officials — and later the New Mexico Attorney General's office — that the rent paid to the city wasn't enough.

An Attorney General's legal opinion said the city was in violation of the state's anti-donation clause, and that has caused a trickle-down effect, prompting the city to ask for fair-market value rents on city buildings, which is difficult for many nonprofits to pay.

That has caused numerous events and activities provided to residents, particularly for senior citizens, to be canceled.

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"There used to be dances at Munson (Senior Center) that I really liked going to," sighed Carmela Delgado, 73. "But all of a sudden, they stopped and there wasn't an explanation why. When some of my friends could finally get to the organizers of the dances, they were told the city wanted more rent and they couldn't afford to pay it. Now, we're left with nothing to do on those Saturdays when we used to go dance."

No choice

Garza said the city has no choice but to comply with state law.

"We have reviewed, and continue to review, long-standing operational agreements, arrangements, and activities taking place within city buildings across all departments and have discovered several areas where change must be made," Garza said. "There are many organizations and groups, some not-for-profits and some for-profits, that have evolved their operations and programming from within city facilities. In some cases, these arrangements are in place solely for the purpose of supporting a city operation or program. In other cases, such activities only partially support the city function, but also expand into service areas of their own choosing."

Fair market rental

Garza added there is case law in which state courts have found violations of the state's anti-donation clause.

It was, for example, a violation of state law when in the past the New Mexico Department of Public Safety provided dormitory housing and meals to Boy Scouts at substantially reduced costs.

It was also against the law for municipal governments to contribute to the construction of an American Legion memorial.

State courts also ruled county commissioners were prohibited from contributing $500 to an American Legion war memorial which was erected on county courthouse grounds.

"Specifically, the DFA has advised us, in writing, that we must charge a reasonable rent or lease, license, or provide an operating agreement that ensures alignment with the applicable provisions of the law," Garza said. "In numerous communities across the state, including ours, dated arrangements had been entered between the city and occupants of public facilities for $1 per year and other valuable considerations.

"...We have been directed that any lease, license or operating agreement with outside entities must contain, at a minimum, the following elements: That the rent be the fair market rental value of the real or personal property, established by appraisal or other acceptable means. That the not-for-profit, or for-profit, organization or corporation be required to pay the fair market rental value, or provide other adequate consideration to the local government the value of which meets or exceeds the fair market rental value. That the not-for-profit or for profit organization or corporation substantiates to the local government the value of the consideration or services it actually provides on a regular prescribed basis."

But none of that makes very much sense to Las Crucen Paulo Triste. All he understands is the art class he was taking has ceased, and he doesn't know when, or if, it comes back.

"I thought government was about us paying our taxes and them taking care of the money we're paying to them," Triste said. "Now, somebody is saying our money isn't enough and everybody has to pay more. I don't, I won't, buy that."

Steve Ramirez can be reached at 575-541-5452. Follow him on Twitter @SteveRamirez6

Anti-donation

• The New Mexico Constitution has an anti-donation clause that limits how public funds and assets — such as state and municipal government buildings — can be used.

• The law states, "Neither the state nor any county, school district or municipality, except as otherwise provided in this constitution, shall directly or indirectly lend or pledge its credit or make any donation to or in aid of any person, association or public or private corporation or in aid of any private enterprise."

•; The Local Government Division of the New Mexico Department of Finance and Administration (DFA) has notified city officials of specific provisions that must be put in place to ensure compliance with the state laws and interpretations.

• Specifically, the DFA has directed the city it must charge a reasonable rent or lease, license, or provide an operating agreement that ensures alignment with the applicable provisions of state law.

• Fair market rent must be charged by the city. That means circumstances of $1-a-year rent for city-owned facilities are not allowed.

• Nonprofit organizations or corporations must either pay fair-market rental value, or provide other adequate consideration to the local government
.

• Organizations or corporations must be able to document or otherwise substantiate to the local government the value of the consideration or services it actually provides.